Many construction industries in developing countries are said to experience serious difficulties in their operations, with inadequate supply 01 building materials ranking high in the list of ills. In Kenya over the years, the industry has also experienced a lair share of problems which have included shortages and at times complete disappearance of certain buikling materials. Shortages of building materials are not desirable as they can lead to disruptions in building programmes and at times complete abandonment of projects. The main objective 01 the study was therefore to investigate the cause of the building materials industry's inability to satisfy demand placed on it. Descriptive survey method formed the basis of the study. The study was thus approached in two ways. Through library research. in chapters one and two. the study analyzed and discussed the structure, organization and the market forces that form and create the economic environment upon which the industry operates. This analysis whilst providing a theoretical background 'for the study also conceived a model that exposed the amenability of the industry to targeting the national development planners. The aforementioned exercise also took into consideration the significant role played by the industry in socio-economic development and welfare of the nation. The second objective 01 the study involved the examination of the effect of the existing government policies. regulations and the implementing institutions on the industry's activities against the generally expressed goals 01 the policies. This objective was carried out hy the use of questionnaires served to building materials manufacturing firms. The aim was to obtain firsthand information and experiences of the manufacturers on the problems beleaguering their operations.